M/s. City Auto Agencies, V. Commissioner of Income-Tax,

WP/19563/1999

AI Insights

The case involves M/s. City Auto Agencies, a firm engaged in the distribution of automobile components, which filed a writ petition against the Commissioner of Income Tax, Vijayawada, challenging an order that upheld an assessment adding Rs.1,50,000 to the firm's income for the Assessment Year 1995-96. This amount was initially declared as undisclosed income under the Voluntary Disclosure of Income Scheme, 1997, and was accepted by the Commissioner of Income Tax, Vijayawada, with the tax duly paid. However, the Assessing Officer included this amount in the regular assessment, leading to double taxation. The High Court found that the Commissioner failed to exercise proper jurisdiction under Section 264 of the Income Tax Act, 1961, leading to the setting aside of the Commissioner’s order.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 742726 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 05-12-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Voluntary Disclosure of Income Scheme, 1997
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Assessment Year 1995-96; Double taxation; Income Tax; Voluntary Disclosure of Income Scheme; Writ petition
• Section: 264; 68(2)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE FIFTH DAY OF DECEMBER TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION No. 19563 OF 1999 Between: M/s. City Auto Agencies, Augunagar, PH NO. 915, 6th Block, 2nd Cross Road, Vijayawada, Rep. by its Managing Partner Mr.Ch. Vijay Mohan ..... Petitioner AND Commissioner of Income Tax, Vijayawada and others .....Respondents The Court made the following : ORDER: (per the Hon’ble Sri Justice Sanjay Kumar) This writ petition was filed assailing the order dated 05.01.1999 passed by the Commissioner of Income Tax, Vijayawada, under Sec. 264 of the Income Tax Act, 1961. The assessee/writ petitioner is a firm carrying on the business of distribution of automobile components made by various manufacturers. In respect of the assessment year 1995-96, it filed a return of income on 30.10.1996. After filing of the return, the petitioner firm filed a declaration under the Voluntary Disclosure of Income Scheme, 1997, offering Rs.1,50,000/- as undisclosed income. This income was shown as an excess debit in its Trading Account with a corresponding credit entry in the account of M/s. Punjab Bevel Gears Limited. Thereupon, the Commissioner of Income Tax, Vijayawada, issued a certificate under Sec.68(2) of the Scheme of 1997 accepting the income declared by the petitioner firm and recording that the tax payable thereon at Rs.52,500/- was duly paid. While so, the Assessing Officer, while processing the return filed by the petitioner firm for the assessment year 1995-96, held that this sum of Rs.1,50,000/- was liable to be added to the income and that the assessee was due and liable to pay a further sum towards tax. Aggrieved by this action of the Assessing Officer, the petitioner firm filed an application before the Commissioner of Income Tax, Vijayawada, under Sec. 264 of the Income Tax Act, 1961. By the order under challenge, the Commissioner rejected the plea of the petitioner firm and upheld the assessment order. Hence, this writ petition. The petitioner firm had offered a sum of Rs.1,50,000/- shown as an excess debit in its Trading Account after filing its return for the Assessment Year 1995-96. This undisclosed income was offered and accepted under the Voluntary Disclosure of Income Scheme, 1997. The Assessing Officer however included the very same income in the regular assessment order. This action amounted to taxing the petitioner twice for the same income. Despite this fact being brought to his notice, the Commissioner of Income Tax, Vijayawada, failed to exercise jurisdiction under Sec.264 of the Income Tax Act, 1961. The order dated 05.01.1999 passed by the Commissioner of Income Tax, Vijayawada, is accordingly set aside and it is made clear that the petitioner firm would not be liable to suffer tax once again on the income of Rs.1,50,000/- offered and accepted under the Voluntary Disclosure of Income Scheme, 1997. The writ petition is allowed. Interim applications, if any, shall stand closed. No costs. ______________________ Kalyan Jyoti Sengupta, CJ. ______________ Sanjay Kumar, J. December 05, 2013 MAS "